Ed Baro
Executive Vice President
moss
“In Miami today, the construction industry is experiencing a remarkable change from the frenetic pace of a few years ago,” says Baro. “While domestic market trends may be slowing, Miami remains busy, but in a more manageable and sustainable way.”
Commodity prices are stabilizing along with equipment delivery times, he adds, and while not back to pre-pandemic levels, those prices have settled into a more predictable place than the peaks of 2020 and 2022 arising from the COVID-19 pandemic and the pandemic. conflict in Ukraine.
“This, along with the overall slowdown in the domestic market, has provided some relief in Miami, allowing subcontractors to catch up on backlogs and helping with pricing,” says Baro. “The city is experiencing a ‘busy good,’ which is a departure from the overwhelming pace of recent years.”
The focus in Miami is also moving away from market rent apartments and offices and toward more diverse and complex projects that are growing in scale and complexity, Baro says. This means more resources and management expertise for the companies tackling these projects to take advantage of the growing influx of resources from other parts of the country flowing into South Florida and to meet the demand for design and construction administration.
“High-end condominiums maintain a prominent presence, while planning for rental projects and commercial office space has seen a decline,” he says. “Rental and market-rate project starts are somewhat hampered by rising interest rates, which are putting pressure on already thin profit margins.”
Luxury condo projects in the right locations, such as Edgewater and Coconut Grove, continue to move forward, Baro says, suggesting a potential resurgence in this sector as developers move to proactively prepare lots for possibility of rapid development.
Supertall structures are also being planned, Baro notes, including the 84-story Cipriani Residences, which Mast Capital and Moss have already broken ground on, which will be the tallest building on Miami’s Brickell Avenue.
He says developers are also looking at the upcoming impact of Florida’s Local Live Act, a 2023 law that boosts affordable housing by offering financing, tax credits and expedited approvals for multifamily developments if at least 40 percent of the units are ‘a multi-family development are dedicated to rental housing. at 120% or less of the area’s median income (AMI) set by the Department of Housing and Urban Planning. In Miami-Dade County, 120% of the AMI for a one-person household is $95,400, rising to $108,960 for a two-person household and $122,520 for a three-person household.
“In today’s market, the multifamily sector remains relatively strong, albeit with notable sensitivity to the credit landscape.”
—Ed Baro, Executive Vice President, Moss
“Given the selective lending environment, this legislation can directly determine whether a project moves forward or is shelved,” says Baro.
Compared to last year, the market has stabilized and uncertainty about the cost and delivery times of materials, commodities and equipment has leveled off somewhat in recent months, he says. Baro points to studies that indicate potential oversupply issues in the Miami market over the past few years, but adds that those dynamics are constantly changing.
But higher construction costs and stricter lending criteria have led to the start of staggered projects, which serve to self-regulate the market and mitigate the risk of oversaturation.
“In the current market, the multi-family sector is still relatively strong, although with a remarkable sensitivity to the credit landscape that dictates the nature of the projects started”, he says.
One of the challenges facing the local market is the influx of new residents driven by the relocation of businesses, including financial institutions such as Blackstone and Citadel, which is driving demand for housing and supporting businesses.
Developers still face challenges, particularly with loan requirements, whose rigorous criteria remain a key factor that companies like Moss evaluate before committing to a new project.
Employment opportunities are more abundant than resources, he adds, and because of persistent labor shortages, job satisfaction is becoming a priority for workers.
“We’ve known this for a long time at Moss,” adds Baro. “That is why we seek to offer the best opportunities in the best projects for our staff by making good offers and equipping them appropriately. Happy employees translate into happy customers.”
